Tesla Will Destroy the Big 3 Automakers, 3641

Good morning, I’m still reporting on the economy.
A recent report in Seeking Alpha makes the case that Tesla will come to dominate what will be one of the biggest and most rapid economic shifts in U.S. history – the switch to electric vehicles and the autonomous driving which will quickly follow.
The blog, written by Simplify Asset Management says that the move to electric vehicles and autonomous driving will create trillions of dollars of value and have the largest impact on society since the iPhone.
But like the iPhone, few today realize the magnitude of the shift that will begin to take shape in the last quarter of this year.
While some automotive analysts hold out hope that the massive power of Ford or General Motors will be able to catch up to Tesla and eventually crush it, others see Tesla’s advantage as overwhelming to the point of dominating the electric vehicle market for years to come, much like Google dominates the search market today.
Very few people understand the swiftness of the changeover to all-electric vehicles. General Motors claims it will be selling 30 all-electric models by 2025 and go all-electric by 2035. Joe Biden claims the U.S. automotive industry will be fully electric by 2050.
However, that will require some major beefing up of the U.S. power grid. This month, California started begging drivers of electric vehicles to minimize their use of charging their cars to prevent rolling blackouts. Normally brightly-lit grocery stores have reduced their lighting to minimal levels and some municipalities have even turned off stop lights.
But the electric vehicle race goes on and increases in ferocity every day.
The most interesting aspect of Tesla’s electric vehicle concept is the end-point of complete Level 5 autonomy. In other words, driving without the need of human intervention. There are 6 levels of vehicle autonomy as defined by the Society of Automotive Engineers (SAE).
Level 0 is no driving automation.
Level 1 is when a vehicle has one automated system for driver assistance. Cruise Control was the first Level 1 automated feature. With the exception of Tesla, this is where the automotive industry is today.
Level 2 brings in advanced driver assistance systems or ADAS. The vehicle can control both steering and accelerating and braking. Level 2 still requires a human to be paying attention to immediately take control of the vehicle at any time. This is where Tesla Autopilot and Cadillac Super Cruise systems are today.
Level 3 allows vehicles to make informed decisions for themselves, such as accelerating past slow-moving vehicles and safely moving thru traffic jams, but it still requires human over-ride if the vehicle is not able to handle a complex situation.
Level 4 vehicles do not require human intervention in most situations.
Level 5 vehicles do not require human intervention, in fact, they may not come equipped with steering wheels or acceleration or braking pedals.
Imagine what would happen if an enemy was able to set off an electromagnetic pulse attack high above a United States where the highways were even partially filled with level 5 vehicles.
That brings us to the two paths to Level 5 autonomy – redundant camera data or LIDAR – a form of radar.
Tesla has chosen the redundant camera data pathway because it already has about 200,000 electric vehicles on U.S. roadways, about 80% of the electric vehicle fleet in the United States.
However, Tesla is the only one with 360 degree redundant camera coverage and that data has been feeding into the Tesla computer network since 2019.
This is almost like creating an up-to-date version of Google Maps on a daily basis. This gives Tesla a huge advantage because they arecreating a real-time map of everywhere Teslas travel down to nearly one-inch in accuracy. That means that Tesla will be the safety winner, and that’s enough in itself to seal their ultimate victory in this, the biggest automotive race in history.
This is in stark contrast to even Google Maps’ fleet of vehicles where they have to pay drivers to continuously compile a much smaller and less up-to-date data set.
With Cadillac’s implementation of Super Cruise, they use only forward-facing cameras. Humans can get a pretty good 360-degree view of their surroundings by using mirrors. In order to get anywhere near Level 4 autonomy, the vehicle must be able to drive better than a human.
Bottom line, Cadillac’s Super Cruise will never become fully autonomous.
Google’s Waymo has 360 degree coverage, but they don’t have the massive network of 200,000 vehicles inputting video data on a daily basis. Waymo uses multiple LIDARs that cost $7,500 each, bring the cost up to nearly $200,000 per vehicle. Without the massive and continuously-updated data set, Waymo will never drive more safely than a human, according to the Seeking Alpha article.
Yes, the price of LIDAR will fall with scale, but by then Tesla’s fleet will be one million vehicles feeding video data continuously into what will soon be Tesla’s supercomputing system – touted to become the largest supercomputer in the world.
On top of the indisputable claim that they will win the safety race because of their massive headstart, Tesla is very wisely using their money to invest in creating the most low-maintenance electric fleet as well.
And this is why Tesla’s electric vehicles will eventually destroy the gasoline-powered car market. A gas-powered vehicle cast at least one-dollar per mile to operate. An electric vehicle will cost 25 cents per mile, plus be much safer. This cost advantage will soon start showing itself and any car company that continues to produce gas-powered vehicles will soon go bankrupt.
Currently, Tesla has the most efficient EV fleet out there. There is currently no production electric that can beat Tesla’s 10-year old 2012 Model S for range – 265 miles. The current Model S exceeds 400 miles of range.
And Tesla’s range improvements don’t come from bigger and bigger batteries. The Tesla model 3 has a drag coefficient of .23, lower than even the Toyota Prius.
On top of that Tesla is focusing on designing their cars to last one million miles. No other electric car even tries to make that claim.
For example, Tesla recently managed to improve the back half of the frame so that it is cast as one single piece a newly-developed form of aluminum instead of 70 pieces welded together.
To pull this off, they developed a much stronger version of aluminum that was already under development from their SpaceX branch. Other EV’s will have to license this new aluminum, or develop around Tesla’s patents.
Tesla has also invested into electronic chip development. Tesla chips are about 6 years ahead of anything Toyota or VW has, and 3 years ahead of the most advanced Nvidia chip, the Orin chip.
The result? For example, the Waymo vehicles that are giving autonomous rides already in Arizona has its trunk packed with computer servers that eat up massive amounts of energy. The result? Waymo cars are limited to 30 minutes of travel before they need a charge.
So, the. Big 3 auto makers can say anything to tout their flood of new electric offerings, but Tesla has a 10-year head start on all of them, and in this business that’s like being a full century ahead of the game. And even if they were able to boost their development cycle to match Tesla’s – which is not likely – Tesla’s lead in capturing map data and lowering the cost per mile just cannot be overcome.
It is inevitable that – barring the untimely demise of its founder, one by one, and sooner than later, Tesla will eventually drive the American big 3 into bankruptcy.
I’m still reporting from just outside the one-time citadel of world freedom. Good day.